Note Summary of significant accounting policies
income and equity. Income tax is determined using the tax
rules that have been enacted or announced by the balance
sheet date and are expected to apply when the related
deferred tax asset is realized or the deferred tax liability is
settled. Tax expenses stated include both current tax due and
deferred income tax.
Deferred tax is provided in full, using the liability method,
on all temporary differences arising between the tax bases
of assets and liabilities and their carrying amounts in the
balance sheet. The principal temporary differences arise from
depreciation of property, plant and equipment, provisions for
pensions and other post-retirement benefits and tax losses
carried forward. The tax rates enacted in each country are
used in determining deferred income tax.
Deferred income tax assets for tax-deductible temporary
differences and loss carry-forwards are recognized only to the
extent it is likely that it will be possible to utilize these items.
The value of deferred tax assets is derecognized when it is no
longer deemed likely that they can be utilized.
Deferred income tax assets are recognized on temporary
differences arising from investments in subsidiaries, except
where the timing of the reversal of the temporary differences
is controlled by the Group and it is probable that the difference
will not be reversed in the foreseeable future.
Cash and cash equivalents
Cash equivalents comprise balances with less than three
months’ maturity, including cash, bank deposits and other
Cash flow statement
Payments in and out have been divided up into three categories:
operating activities, investing activities and financing
activities. The indirect method is used for flows from operating
The changes during the year in operating assets and
operating liabilities have been adjusted for the effects of
changes in exchange rates. Acquisitions and disposals are
recognized under investing activities. The assets and liabilities
that acquired and divested companies had at the time of
the change are not included in the analysis of the changes
in operating capital, nor in changes to balance sheet items
recognized under investing and financing activities. These
items are reported separately under investing activities.
Earnings per share
The calculation of earnings per share is based on the consolidated
profit attributable to the Parent’s shareholders and the
weighted average number of shares outstanding during the
When determining earnings per share after dilution, a
company must base its calculations on the company’s shares
and stock options which could result in dilution being exercised.
Compensation from these instruments will be deemed
to have been received from the issuing of ordinary shares
at the average market price for ordinary shares during the
period. The difference between the number of issued ordinary
shares and the number of ordinary shares that should have
been issued at the average market price for ordinary shares
during the period shall be treated as an issue of ordinary
shares without consideration. According to paragraph 47 of
IAS 33, options and stock options only have a dilutive effect
when the average market price for ordinary shares during the
period exceeds the exercise price for options or stock options.
Pricing between Group companies is carried out on market
The dividend to shareholders in the Parent is recognized as a
liability in the consolidated financial statements in the period
when the dividend was approved by the shareholders.
Accounting policies – Parent
The Parent company has prepared its financial statements in
accordance with the Swedish Annual Accounts Act and the
Swedish Financial Reporting Board’s recommendation RFR 2
“Accounting for legal entities”. No differences with the Group’s
accounting policies have been identified.